Market focus will be largely attuned to another batch of earnings results, with names like Apple (NASDAQ:AAPL) and Facebook (NASDAQ:FB) both set to report in the coming days. Those names follow a string of tech earnings that have been largely disappointing. Weaker-than-expected results from Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) last week exacerbated investors’ worries about the dominance of tech stocks in this market cycle.
Besides earnings, the monthly U.S. jobs report, which is expected to remain in territory consistent with a strengthening labor market, will be the biggest economic data point of the week. Investors will also be bracing for any news out of the political sphere, as the U.S. midterm elections – due in November – draw closer. Across the Atlantic, traders will focus on flash euro zone inflation figures, which are likely to lend support to the European Centrals Bank’s decision not to rush stimulus withdrawal.
On the central bank front, monetary policy announcements from the Bank of England and the Bank of Japan will also be on the agenda, though it’s highly unlikely either will rock the boat policy-wise.
The five biggest events on the economic calendar that are most likely to affect the markets.
1. Apple Highlights Last Big Week of Q3 Earnings
About a quarter of S&P 500 companies report in what will be the last big week for third-quarter earnings on Wall Street. Apple will get the most attention when it releases results Thursday after the closing bell. The world’s largest company by market cap is expected to report adjusted earnings of $2.78 per share on revenue of $61.43 billion. In addition to those top- and bottom-line numbers, investors will be paying close attention to iPhone unit sales. Growth in Apple’s services business will also be in focus.
Some of the other high-profile names reporting in the week ahead include Mondelez (NASDAQ:MDLZ) on Monday; Facebook, eBay (NASDAQ:EBAY), Baidu (NASDAQ:BIDU), General Electric (NYSE:GE), Mastercard (NYSE:MA), Coca Cola (NYSE:KO), Under Armour (NYSE:UAA), and Pfizer (NYSE:PFE) on Tuesday; General Motors (NYSE:GM), Sprint (NYSE:S), and Yum! Brands (NYSE:YUM) on Wednesday; Starbucks (NASDAQ:SBUX), Teva (NYSE:TEVA), Spotify (NYSE:SPOT), DowDuPont (NYSE:DWDP), and GoPro (NASDAQ:GPRO) on Thursday, and Exxon Mobil (NYSE:XOM) and Alibaba (NYSE:BABA) on Friday.
2. U.S. Jobs Report
The U.S. Labor Department will release the nonfarm payrolls report for October at 8:30AM ET on Friday. The consensus forecast is that the data will show jobs growth of 191,000, after adding 134,000 positions in September, while the unemployment rate is seen inching up to 3.8% from 3.7%. However, most of the focus will likely be on average hourly earnings figures, which are expected to rise 3.1% from a year earlier, a tad quicker than the 2.8% increase a month earlier.
A report on U.S. personal income and spending, which includes personal consumption expenditures (PCE) inflation figures, the Fed’s preferred metric for inflation, will also capture the market’s attention. Other top-tier economic data due this week includes ADP private sector payrolls, CB consumer confidence, car sales, trade figures, construction spending and the ISM survey on manufacturing sector activity. Data released last week showed the U.S. economy grew at a 3.5% annualized rate, keeping growth on track to hit the Trump administration’s 3%-target this year.
The Federal Reserve remains on course to raise interest rates again in December, despite a recent tightening in financial market conditions brought about by a stock market sell-off and a rise in U.S. Treasury yields.
3. Euro Zone Flash Inflation
The euro zone will publish flash inflation figures for October at 5:00AM ET on Wednesday. The consensus forecast is that the report will show consumer prices rose 2.1%, unchanged from the preceding month. The core figure, without volatile energy and food prices, is seen inching up to 1.0% from 0.9%. Germany, France, Italy and Spain will produce their own CPI reports throughout the week. Besides inflation, the euro zone will publish flash third-quarter GDP data on Tuesday, which is expected to confirm that growth in the single currency bloc has moderated since the start of the year.
Last week, the European Central Bank confirmed plans to wind down its massive stimulus program by year-end and raise interest rates sometime after next summer, even amid mounting signs that the euro zone economy is wilting under global pressures.
4. Bank of England Policy Announcement
The Bank of England when it meets this week. A decision is due at 8:00AM ET on Thursday. BoE Governor Mark Carney will hold a press conference shortly after the announcement, and investors will monitor his language for signals on what the appetite is for hikes through the end of the year and beyond. Most economists think the British central bank will wait until May 2019 to raise rates again, assuming Britain leaves the European Union with a deal.
Political headlines will also be in focus as investors watch developments surrounding ongoing Brexit negotiations. With less than five months until Britain leaves the EU, the government has yet to agree a divorce deal with Brussels, as Prime Minister Theresa May’s Conservative party remains split on how close the country should remain to the bloc. Also on the agenda, UK finance minister Philip Hammond will present his budget to parliament on Monday. Hammond is under pressure from Prime Minister May to end a decade of austerity to see off a rise in popularity of the opposition Labour Party.
5. Bank of Japan Policy Meeting
The Bank of Japan is widely expected to keep its short-term interest rate target at minus 0.1% and the 10-year government bond yield target at around zero percent at the conclusion of its two-day meeting on Wednesday. Media reports over the weekend indicated that the BoJ will consider making a slight change to the timing of its government debt purchases to encourage more trading activity between financial institutions. The central bank may also consider reducing the frequency of its purchases of mid- and long-term debt, reports said.
The changes, although small, would be the latest sign Governor Haruhiko Kuroda is gradually walking away from his radical stimulus program deployed five years ago to shock the public out of a sticky deflationary mindset. After half a decade of heavy money printing failed to fire up inflation, the BoJ is under pressure to address the rising cost of prolonged easing, such as the hit to bank profits from near-zero rates, which would require raising rates.